06 January 2012
I need a clarification for the following TDS issue.
Ex: We have received a foreign bill of Rs. 100 without adding any service tax. We the service receiver need to bear the service tax and the total bill including service tax comes to around Rs. 110.3. Now we have to deduct TDS. But the Vendor is not agreeing to deduct TDS on 110.3 and he insists to deduct TDS on Rs. 100 since he raised the bill only for Rs. 100.
In this regard I need your valuable suggestions for the following issues
1. Can I gross up Rs. 100 for the purpose of bifurcating base amount and service tax. i.e. out of Rs. 100, base amount is Rs. 90.66 and service tax portion is Rs. 9.33 and deduct TDS on Rs. 100 including service tax. (or)
2. Is it mandatory to add service tax portion to bill amount of Rs. 100 and pay TDS on Rs. 110.3(Including service tax of Rs. 10.3).
Kindly offer your advice for the above issue with supporting tax provisions
06 January 2012
Dear friend according to the provisions of the Service Tax as applicable you have to deduct TDS on Rs. 100/- and you have to pay service tax of Rs. 9.33 out of Rs. 100/- bill received by you. thanks
CAclubindia
